Calculate the break even point for the device in months

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Reference no: EM13732697

Paul Scott has a 2008 Cadillac that he wants to update with a GPS system so that he will have access to up-to-date road maps and directions. Aftermarket equipment can be fitted for a flat fee of $500, and the service provider requires monthly charges of $20. In his line of work as a traveling salesperson, he estimates that this device can save him time and money, about $35 per month (as the price of gas keeps increasing). He plans to keep the car for another 3 years.

a. Calculate the breakeven point for the device in months.
b. Based on a, should Paul have the GPS system installed in his car?

Reference no: EM13732697

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